If you are getting ready to put your home on the market, you are likely wondering at what cost you should list the home. This is where a comparative market analysis-also known as a CMA-comes in handy. The CMA helps you evaluate properties in the area that are like your property. You can use the information on recent sales and homes in the area to figure out how much your home is worth.
There are several tools available that can help you conduct your own comparative market analysis to price your home accordingly. You have to compile some information about your property before you can start using the other tools available to calculate the value.
So where do you find information on homes that are comparable to your own home? One of the first places you can look is online. Online real estate websites, such as Zillow and Trulia, allow you to search for homes by address, neighborhoods or zip codes. The sites list current listing prices, recent sales prices and information about the property, such as square footage, amenities and more.
Neighborhood Home Values
Using Zillow or another online tool, search for homes that are in the same neighborhood or within a five-mile radius of your home. In order to evaluate the value of your home, you have to start with geography. The homes you consider should be in the same neighborhood or within one to five miles of your own property.
Property market values can vary drastically by neighborhood or zip code, so it is important to look at comparable homes that are as close to your home as possible.
Narrow your search down to the homes that are a similar style to your home. If you have a single family home, then search for other single family homes. If your home is a townhouse or condo, then search for similar townhomes or condos. Eliminate the homes from your search that do not fit the criteria.
From the list of similar style homes, narrow your options down to those that are the same square footage or similar square footage to your own home. It is best to compare homes that are as close in square footage to your home as possible. Avoid comparing homes that are hundreds or thousands of square feet larger or smaller than your home.
A comparable home is the same size of your home or as close to it as you can possibly get. For example, when you are researching recent home sales in your neighborhood, you can't really compare a home that is twice the size of your home. If your home is 2,000 square feet, then you want to look for homes that are within a couple hundred square feet of your home (ideally, 1,800 square feet to 2,200 square feet).
Consider Amenities and Age
Find homes that have the same or similar amenities to your own home. If your home has a pool, home in on the homes that also have a pool. If your home has three bedrooms, find other homes that have the same number of bedrooms.
Determine the age of each comparable home. Weed out the homes that are much older or newer than your own home. Keep the information on the homes that are the same age or as close as possible in age to your home.
Recently Sold Properties
Locate homes that have sold in the last three to six months. Recent home sales help you to determine the current value of your home. Recent sales prices of comparable homes is typically within a one to two month period. You can extend your search up to six months if there are not enough more recent sales to conduct your analysis. You can also consider current listing prices for comparable homes and the sales prices for homes where contracts fell through or were canceled.
Compare the condition of the home to your home. You can use tools, such as Google Maps, to pull up a picture of the home online. You can also drive by the home to see the condition of the home. The condition of the home is another factor that affects the value of the property. A home that is maintained and well-kept over the years can bring in a higher value than the same property down the street that is dilapidated and falling apart.
Calculate Your Home's Comparative Market Value
Calculate the market value estimate of your home. The down and dirty way to calculate the CMA of the home is to divide the sales price of comparable homes by the square footage of those homes. This gives you a price per square foot.
For example, if a 2,800 square foot home sold one month ago for $200,000 then the price per square foot is $71.43 per square foot. You can then take the square footage of your home and multiply it by the $71.43 to obtain the approximate market value of your home.
Additional Sources for Adjusting Value
While searching through comparable properties to estimate the value of your own home, consider these other factors.
Upgrades, such as new bathrooms and kitchens add value to a home. Adding square footage, such as building an addition also adds value to a home. Two homes that are exactly the same in style, square footage, neighborhood and amenities can vary in pricing because one has a brand new kitchen while the other has the original kitchen.
Pull Building Permits
Go to the county website for where the property is located. Research and find any building permits that were issued on the property. View the work that the permit covers, such as remodeling a kitchen or adding an addition on to the home. Permits can help you pinpoint the upgrades the home has or the square footage that has been added to the home.
Review Tax Records
The county tax collector's website contains information on the assessed value of each property for property tax purposes. Review the tax assessed values of the properties to get an idea of the market value of each home.
In most counties, the assessed value is generally less than the market value of the home. Pay special attention to the square footage and the lot size the county includes as part of the tax assessment. This can be different from the actual square footage of the home if the property owner added on to the home without building permits.
More Tools for Comparison
Once you gather the information on your home, you can start comparing the information to other homes in the area. You can find information on comparable properties to your property using various tools and resources that are available to you.
Real Estate Magazines and Real Estate Classifieds
Local real estate magazines and classified sections of local newspapers are also good sources of information. You can view homes that up for sale and compare the properties' locations, square footage and amenities to your own property to gather comparable properties.
Numerous online tools are available to help you pinpoint the market value of your home. Chase provides a market value estimator. Insert your home address and hit the get value button. For example, the Chase estimator uses access to public property records to estimate the current value of your home.
Estimate the Value
The best way to find the current market value of your home is have a professional appraisal done on the property. Conducting a comparative market analysis, however, allows you to determine the approximate market value of your home, which is helpful in setting a price for your home when you are selling it. While you can hire a real estate agent to prepare the CMA for you, you can also conduct your own CMA with a few simple tools.